Pension Maximization Using Life Insurance To Provide The Guaranteed Capital!

For people who are in pension plans, (yes there are some in the private section, but mostly in the government sectors), they face a decision at retirement  of how to take the retirement income distribution. 

Basically,  they have two options.  They can take a lifetime income, which is the highest income the annuitant can receive over their lifetimes.  Or, they can take some variation of a survivorship  benefit for their spouse.  The 50% joint payout is the normal payout, however, some plans will allow 75% and 100%.  The higher the percentage spousal benefit, the lower the annuitant payout.     

Example:  

This example uses the joint and survivor 50% payout. 

Let us assume if the annuitant takes the single life payout, the payout would be $2,100 per month.  If the annuitant took the survivorship options, the payout would be $1,600.  There is a $500 difference per month.  Should the spouse die first, usually, the surviving annuitant is stuck with the $1,600 for their life.  

On the other hand, if the annuitant took the life income of $2,100 and dies first, the spouse receives nothing.  

Options: 

A great guarantee options, is to purchase  a life insurance  plan in the amount which will represent the present value of the survivorship value would be. 

By purchasing a $285,000 life insurance policy, using an assumption of 3% earnings on the investment, the payout would be guaranteed for 20 years.  If the annuitant wanted the $1,600 a month for a 25 year period, the present value is $334,332.  

Scenario: 

If the annuitant dies first, the pension would end, however, the life insurance would be paid tax free.  The surviving spouse could invested  the proceeds and take withdrawals from the account  equal to what the spouse would have received under the joint and survivor pension payout.  The spouse could take more or less, as needed. 

If the spouse predeceased the annuitant the  life insurance can be cashed out, or continue to stay in force to create a legacy for the family.  The policy also can also be used to supplement a retirement income for the annuitant using the cash value. 

Unlike the pensions joint and survivor option, the Pension Maximization Plan offers much more flexibility in the planning.  It also allows for maximum payout should the annuitant live a long life while providing security for the spouse. 

Special Free Report”; If you are interested in a tax-free retirement sponsored by your company, get this special report called; Wealth Without Taxes.  This is a plan designed for business owners and key executives, not the rank and file.  Besides tax free benefits, the program offers business owners the ability to shift business income to their personal ledger with minimum tax exposure. To get this report, CLICK FOR YOUR REPORT   Once you fill out your email information, you will receive the report.  Thank you. 


https://youtu.be/DF-GwmDD6kQ

Click to view a 4 minute video.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s